Top ten airline groups ranked by seats from Europe to Asia Pacific 6-Apr-2015 to 12-Apr-2014. In todays highly competitive market, the companys ability to adapt, innovate, and successfully execute its business model has been nothing short of remarkable. Revenue Streams: Lufthansa generates revenue through ticket sales (business, economy, and first-class), cargo transportation, ancillary services (baggage fees, onboard sales), and loyalty programs. Lufthansa expects a significantly improved result in 2015, when ASK growth will be 3%, although it expects unit revenue to fall. These include airline catering (LSG SkyChefs) and MRO (Lufthansa Technik), both of which are the biggest in the world in their respective fields. Uncertain fuel prices and growing concerns about environmental regulations have put pressure on airlines to invest heavily in fuel-efficient aircraft and adopt sustainable practices. In terms of responsibility for its employees, the Lufthansa Group attaches great importance to offering its staff an attractive working environment with transparent structures, efficient processes and a wide range of social benefits. So efficiency improvements in technical fleet management are being sought by pooling the fleets engines across the Group in future, for example, in order to maximise their useful lives and better coordinate maintenance. The airlines within the Lufthansa group occupy positions across a range of market segments, both in terms of product/service offer and national geographies. Overall, these measures will enable the Lufthansa Group to offer its customers a unique product experience and thus significantly differentiate itself from the competition. Accountability for Leaders, 8 Ways to Meet Your Goals with Time Management, Property Management Goals To Set In 2023 And Beyond, Human Resources Goals To Set In 2023 And Beyond, Accounting Goals To Set In 2023 And Beyond. The Lufthansa Group also includes sustainability aspects as a key factor in the design of its products and services. Customer Segments: The company targets a diverse range of customer segments, including corporate clients, leisure travelers, premium passengers, and budget-conscious customers. As illustrated in the Value Chain diagram, Lufthansa Deutsche has five generic categories of primary activities . These trends are: shifting customer behavior on both retail and business sides, changing dynamics within direct and indirect sales channels, and the rise of digital technologies. Within the framework of these net goals, the Lufthansa Group sets itself specific efficiency targets for reducing carbon emissions in its core business segment that are line with the Paris Agreement and have been validated by the internationally recognised Science Based Targets initiative (SBTi) supported by the UN. Health Management and Occupational Safety, Financial strategy & value-based management, Corporate Governance Declaration, Section 289f HGB, Declaration of compliance, Section 161 AktG, Information on corporate governance practises, Board of Management and Supervisory Board procedures, Compensation of the Executive Board and Supervisory Board, Law on the equal participation of women and men in executive positions, Articles of Association and Rules of Procedure, Shares held by members of the Executive Board. For example, Lufthansa's India network provides important fee Also, the high operating costs, a complex organizational structure, and unionized workforce add to their challenges related to efficiency, flexibility and employee management. WebAccomplished at strengthening competitive advantage, operational efficiency, accurate budgeting & forecasting. https://www.twitter.com/Aviation_Pros To remain successful, the company must remain adaptable, capitalize on emerging opportunities, and stay ahead of its rivals. Our newsletter is packed with essential growth strategies for your business. Compare the value chains of rivals in an industry to understand differences in prices and costs. Learn how top companies Take advantage of our great value fares with low cost flights to Los Angeles International Airport (LAX) direct from London Heathrow or from 8 Tips For Running A Successful Leadership Meeting, Agile Meetings: The Definitive Guide To Effective Meetings, The Ultimate Guide For Recurring Meetings (2023), How To Reduce Work Meetings: Tips For Fewer Meetings, Too Many Meetings: How To Be More Efficient As A Team, FeaturedAI Replacing Jobs Statistics (2023). The productivity of aircraft and crews is to be boosted by reducing the number of aircraft types in the long-haul fleet and permanent optimisation of operating processes and the route network. For example customers are willing to pay more for flawless uniform experience in Apple products even though Apple products are not the cutting edge products. This new long haul low cost operation will launch six long haul destinations from Cologne/Bonn in summer 2016. FeaturedMeeting Opening Reflections To Enhance Business Productivity, Starbucks: Business Model, SWOT Analysis & Competitors, Biomedical Engineer Salary And Job Description, How To Have Structured Meetings Every Day. A full rift would mean new strategies for each. Low cost airlines affect passenger volume of the airlines, 4. Manager at Deutsche Lufthansa AG: A Competitive History needs to see each activity as part of that value system and how adding each activity or reducing each activity impact the Deutsche Lufthansa AG: A Competitive History value chain. 8. Nevertheless, a greater degree of integration would offer increased efficiency to the Lufthansa group. The Deutsche Lufthansa AG: A Competitive History (referred as Lufthansa Deutsche from here on) case study provides evaluation & decision scenario in field of Global Business. Lufthansa, a prominent airline company, faces considerable competition from various other airlines in the global market. It therefore builds continuously on its environmental commitment, is dedicated to many social issues and treats its employees and partners in the value chain responsibly and fairly. In view of changes to the structures of supply and demand, an even greater focus on the customer is a core element of the Group strategy. The aim of the development is to achieve lean, flexible and efficient structures as well as quicker decision-making processes. SWOT Analysis is a proven management framework which enables a brand like Lufthansa to benchmark its business & performance as compared to the competitors, and make strategic improvements. Lufthansa is one of the largest & founding member of Star Alliance 2. Step 7 - Organizing & Prioritizing the Analysis into Lufthansa 2012 Case Study Solution For instance, the digital customer portal enables customers to access all relevant information and resolve issues quickly and easily thanks to new, interactive self-service options. Shareholder value, measured by stock price, is not a good barometer to analyze value chain. For example in the consulting companies HR is the main source of competitive advantage. For the purpose of this article the definition is broad it can mean moulding plastic to make products, using customer data to serve advertisements based on usage behavior to clients etc. Despite the challenges faced in the industry, Lufthansa focuses on continuous improvement and adaptation to retain its position as a leading global airline. Corporate responsibility and identity are put into practice locally and supported by overarching functional processes that enable synergies and economies of scale. There are a host of historical and cultural reasons why integration within the Lufthansa group (and within other large European airline groups) has been slower. The Lufthansa Group aspires to lead the airline industry with high standards in this area too. In its product and service development, the Lufthansa Group applies the principle of Reduce Recycle Reuse Replace to avoid waste. Source: CAPA analysis of airline company traffic and financial statements and press releases. It thus aims to forge long-term relationships with them. Through all these efforts, the company aims to surpass customer expectations and contribute to the growth and development of a world connected by air travel. Scrum Be Used To Improve Business Processes? This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. 7. The Lufthansa Group is one of the biggest airlines worldwide and a leading European airline group. WebPESTEL analysis is critical to understand the external threats & opportunities arising because of the macro environment developments. As noted above, Lufthansa is increasing its presence in the LCC segment of the market with Eurowings. Strategic alliances and acquisitions with other airlines or companies in related sectors can offer the benefit of network expansion and cost reduction. Our immersive learning methodology from case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Global Business field, competitive advantage, steps to value chain analysis,industry analysis,primary activities, support activities, inbound outbound logitics,marketing & services, and more. He answered the question in two parts How companies benefit or limited by the structure of their industry, and second a firms relative position within that industry. Top ten airline groups ranked by seats from Europe to Europe 6-Apr-2015 to 12-Apr-2014, Source: CAPA - Centre for Aviation and OAG. Germanwings is in the short haul point to point lower fares segment. Assessing feasibility of the new initiative in Germany 4. Through Compensaid and Squake, the Lufthansa Group offers passengers with the Groups own airlines and also those travelling with other airlines the option of reducing CO2 emissions by purchasing sustainable fuels (SAF) or offsetting them through high-quality climate protection projects. Pilot strikes have continued into 2015 as both parties struggle to resolve their differences, ostensibly over pilot retirement age and pension benefits, but also related to the increasing use by the group of lower cost vehicles avoiding the central collective labour agreement. This was a further example of Lufthansa's instinct to call for protectionist barriers to defend against competitors with disruptive new business models. It may therefore make sense for certain Aviation Services companies to further develop outside the Lufthansa Group or together with partners. CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets. 1. Lufthansa itself, SWISS and Austrian (and Brussels Airlines, which is only 45% owned by Lufthansa and so strictly not part of the group) have all been part of the same group for almost six years, but the degree of integration appears to be less than seen at merged groups in North America (such as Delta after the acquisition of Northwest and the merger of United and Continental). For example the finance and planning at Lufthansa Deutsche are managed at corporate level while quality management, accounting and legal issues are managed at business unit level. A full rift would mean new strategies for each. WebStrengths of Lufthansa Strengths are the firm's capabilities and resources that it can use to design, develop, and sustain competitive advantage in the marketplace - Talent Unreal engine vs Unity: Which one is better? For example, the complexity was reduced by simplifying the base and AOC structure including by ending the flight operations of SunExpress Deutschland and passenger flight operations at Germanwings. The Lufthansa Group also works with policymakers and partners in industry, technology and research to promote the industrialisation and use of sustainable fuels. What are the key value-creating activities at each step in the chain?

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